ToughBuilt Industries Announces Receipt of Notice from Nasdaq Regarding Late Filing of Quarterly Report on Form 10-Q
ToughBuilt Industries (NASDAQ: TBLT) announced it received a notice from Nasdaq on May 22, 2024, due to the company's failure to file its Form 10-Q for Q1 2024 and Form 10-K for FY 2023. This non-compliance with Nasdaq Listing Rule 5250(c)(1) requires timely submission of financial reports. The notice does not immediately affect the company's stock listing, but continued non-compliance could lead to delisting. ToughBuilt has until June 8, 2024, to submit a plan to regain compliance, and potential extensions could extend the deadline to October 14, 2024. The company is working to complete the required filings and will update accordingly.
- The notice does not have an immediate effect on the listing of ToughBuilt's shares on Nasdaq.
- ToughBuilt has until June 8, 2024, to submit a compliance plan to Nasdaq.
- Nasdaq may grant up to 180 calendar days, or until October 14, 2024, to regain compliance by filing the missing reports.
- ToughBuilt has not filed its Form 10-Q for Q1 2024 and Form 10-K for FY 2023.
- Non-compliance with Nasdaq Listing Rule 5250(c)(1) could potentially lead to delisting.
- The company has already received a delinquency notification on April 25, 2024, concerning its Form 10-K.
- Failure to regain compliance by the deadlines could result in delisting proceedings.
Insights
The delay in filing Form 10-Q and Form 10-K indicates potential financial instability or operational issues within ToughBuilt Industries. For investors, this is a red flag as it raises concerns about the company's financial transparency and reporting standards. The notification from Nasdaq adds to the urgency, as failure to comply within the stipulated time could lead to delisting, significantly affecting the stock's liquidity and visibility.
Investors should be aware that the inability to file timely reports may also suggest internal challenges, such as accounting or staffing issues. These concerns could translate to heightened risk and potentially lower investor confidence in the short term. The company's assurance of working diligently to meet compliance is positive, but until tangible results are seen, caution is warranted.
In terms of the industry, timely financial reporting is a norm and any deviation could place the company at a disadvantage compared to its peers. If ToughBuilt Industries fails to regain compliance, the possible delisting from Nasdaq would be a severe blow, making it harder for the company to attract institutional investors and maintain its market presence.
Given the company's ongoing efforts, the situation does not call for immediate alarm but does necessitate close monitoring. Investors should look for updates on the company's compliance plan and subsequent filings to gauge the company's progress and commitment to resolving these issues.
The notice from Nasdaq highlights a critical compliance issue under Nasdaq Listing Rule 5250(c)(1), which requires companies to file periodic financial reports timely. Infractions like these can lead to severe consequences, including delisting from the exchange if not resolved. The company's late filings and the ensuing notices place them on a corrective timeline. If their compliance plan is accepted, they have until October 14, 2024, to address these issues. However, failure to adhere could result in a forced delisting, which would significantly impact shareholder value and the company's market accessibility.
It is important for investors to understand the implications of delisting, which could mean reduced market visibility and difficulty in trading shares. The potential appeal process to a Nasdaq Hearings Panel offers a procedural avenue but does not guarantee a positive outcome. From a legal standpoint, this scenario underscores the importance of rigorous internal controls and adherence to financial reporting standards to avoid regulatory and compliance pitfalls.
IRVINE, Calif., May 24, 2024 (GLOBE NEWSWIRE) -- ToughBuilt Industries, Inc. (NASDAQ: TBLT) (the “Company”) today announced that it has received a written notice (the “Notice”) on May 22, 2024, from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) stating that because the Company has not yet filed its Form 10-Q for the quarter ended March 31, 2024 (the “Form 10-Q”) and because the Company remains delinquent in filing its Form 10-K for the year ended December 31, 2023 (the "Form 10-K"), it is not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”), which requires listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission (the "SEC").
This Notice has no immediate effect on the listing of the Company's shares on Nasdaq. However, if the Company fails to timely regain compliance with the Rule, the Company's common stock will be subject to delisting from Nasdaq.
As previously disclosed in the Company’s Current Report on Form 8-K filed on April 25, 2024, the Company received a separate delinquency notification (the “Initial Notice”) from Nasdaq, advising the Company that due to the Company’s failure to timely file its Form 10-K, the Company is not in compliance with the Rule. In the Initial Notice and reiterated by Nasdaq in the May 22, 2024 Notice, the Company has 60 days, or until June 8, 2024, to submit a plan to Nasdaq to regain compliance with respect to the late Form 10-K and Form 10-Q. If Nasdaq accepts the Company’s plan, then Nasdaq may grant the Company up to 180 calendar days from the prescribed due date of its Form 10-K, or until October 14, 2024, to file the late Form 10-K and Form 10-Q to regain compliance with the Rule.
The Company intends to submit its plan to Nasdaq no later than June 8, 2024. If Nasdaq does not accept the Company’s plan, then the Company will have the opportunity to appeal that decision to a Nasdaq Hearings Panel.
The Company is working diligently to complete its Form 10-K and Form 10-Q and will provide an update once more information is available.
ABOUT TOUGHBUILT INDUSTRIES, INC.
ToughBuilt is an innovative advanced product developer, manufacturer, and distributor with an emphasis on innovative products, currently focused on tools and other accessories for the professional and do-it-yourself construction industries. We market and distribute various home improvement and construction product lines for both the do-it-yourself and professional markets under the TOUGHBUILT brand name within the global multibillion-dollar per year tool market industry. Our in-house design team creates all our products. Since launching product sales in 2013, we have experienced significant annual sales growth. Our current product line includes three major categories, with several additional categories in various stages of development, consisting of Soft Goods & Kneepads and Sawhorses & Work Products. Our mission is to provide products to the building and home improvement communities that are innovative and of superior quality derived in part from enlightened creativity for our end users while enhancing performance, improving well-being, and building high brand loyalty. Additional information about the Company is available at: https://www.toughbuilt.com/.
Forward-Looking Statement
The statements in this release that are not historical facts constitute “forward-looking statements” made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include the expected timing of the Company’s filing of its Annual Report on Form 10-K for the year ended December 31, 2023, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, the potential submission of a plan to Nasdaq and the potential for Nasdaq to accept such plan or grant the Company an exception period or the success of any hearing process, and the Company’s ability to regain compliance with the Nasdaq continued listing standards. Management cautions the reader that these forward-looking statements are only predictions and are subject to a number of both known and unknown risks and uncertainties, and actual results, performance, and/or achievements of ToughBuilt Industries may differ materially from the future results, performance, and/or achievements expressed or implied by these forward-looking statements as a result of a number of factors. These factors include, without limitation, the resulting effects on the Company’s reported financial results and the delay in the Company’s reporting of its financial results and filing of its Form 10-K and Form 10-Q with the SEC, the possibility that the Company is unable to regain compliance with, or thereafter continue to comply with, the Nasdaq Listing Rules, or experience violations of additional Nasdaq Listing Rules, the possibility that the Nasdaq may delist the Company’s common stock. More detailed information about the ToughBuilt Industries and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K. Investors and security holders are urged to read these documents, as well as other documents we file with the SEC, free of charge on the SEC’s website at http://www.sec.gov and also available through the Company’s website at www.toughbuilt.com. The contents of our website are not incorporated by reference into this press release. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events, or otherwise, except as required by law.
Investor Relations Contact:
KCSA Strategic Communications
toughbuilt@kcsa.com
ToughBuilt Press & Media Contact:
pr@toughbuilt.com
FAQ
Why did ToughBuilt receive a notice from Nasdaq on May 22, 2024?
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